CTO Realty Growth (NYSE:CTO) Q4 2025 Earnings call February 20, 2026 09:00 AM ET Company ParticipantsCraig Kucera - Managing DirectorJason Weaver - Managing DirectorJay Kornreich - VP of REIT Equity ResearchJenna McKinney - Director of FinanceJohn Albright - President and CEOPhilip Mays - CFOConference Call ParticipantsGaurav Mehta - Managing Director and Senior Equity Research AnalystJohn Massocca - Senior Research AnalystOperatorLadies and gentlemen, thank you for standing by. Welcome to the CTO Realty Gr ...

Financial Data and Key Metrics Changes - For Q4 2025, Core FFO was $15.8 million, an increase of $1.6 million compared to $14.2 million in Q4 2024, with a per-share increase from $0.46 to $0.49 [13] - For the full year 2025, Core FFO reached $60.5 million, up $12.6 million from $47.9 million in 2024, with per-share figures slightly decreasing from $1.88 to $1.87 due to reduced leverage [14] - Same-property NOI for shopping centers increased by 4.3% in Q4 2025, driven by leasing activity and reduced maintenance costs [16] Business Line Data and Key Metrics Changes - The company signed leases for 189,000 sq ft in Q4 2025, including 167,000 sq ft of comparable leases, with a cash rent increase of 31% [4] - For the full year, a record 671,000 sq ft was leased, with 592,000 sq ft being comparable leases and a cash rent increase of 24% [5] - The signed, not open pipeline stands at $6.1 million, representing approximately 5.8% of annual cash base rents, with expectations for significant earnings growth [7] Market Data and Key Metrics Changes - The company acquired Pompano Citi Centre for $65.2 million, which is currently 92% occupied and presents future leasing opportunities [8] - The acquisition of Ashley Park and structured investments during 2025 totaled $166 million at a weighted average initial cash yield of 9% [9] Company Strategy and Development Direction - The strategic focus is on shopping centers in high-growth Southeast and Southwest U.S. markets, with proactive asset management yielding strong results [4] - The company is under contract to acquire a 384,000 sq ft shopping center in Texas for approximately $83 million, indicating ongoing expansion efforts [10] - Six outparcels for development have been identified, with investments expected to average about $5 million each, targeting low double-digit yields [11] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future earnings growth, particularly from leasing and capital recycling strategies [11] - Initial earnings guidance for 2026 is set at $1.98-$2.03 for Core FFO per diluted share, with same-property NOI growth for shopping centers projected at 3.5%-4.5% [19][20] Other Important Information - The company ended 2025 with $167 million in liquidity, providing ample capacity for future acquisitions [18] - The net debt to EBITDA ratio improved to 6.4 times, down from 6.7 times, indicating better leverage management [19] Q&A Session Summary Question: Timing for backfilling vacant anchor centers and rent commencement - Management indicated that they expect to resolve the remaining vacancies within six months, with rent contributions ramping up in 2026 and 2027 [22][24][26] Question: Value and opportunity for disposing of the New Mexico office property - Management noted that the property is now marketable due to new leases and is considering reinvesting proceeds into open-air centers [27][28] Question: Insights on Pompano Citi Centre's lease-up opportunities - Management highlighted significant lease-up potential, particularly with JCPenney, which currently pays minimal rent [32][33] Question: Acquisition pipeline and market conditions - Management is actively seeking larger shopping center acquisitions, noting limited availability in the market [46] Question: CapEx expectations moving forward - Management indicated that the elevated CapEx in Q4 was due to specific leases and that future run rates would likely be lower [52][54] Question: Timing and recognition of signed, not open leases - Management clarified that the recognition of these leases would be ratable, with a slight ramp-up expected in the latter half of 2026 [38][58] Question: Market allocation strategy for new properties - Management stated that they are not looking to add to Atlanta and will focus on other high-growth markets [60] Question: Relative merits of different property types - Management discussed the advantages of lifestyle and power centers over grocery anchors, emphasizing higher yields and growth potential [64][66]

Financial Data and Key Metrics Changes - Revenue increased by 1.8% to $249 million compared to the fourth quarter of 2024, driven by both office and multifamily revenue growth [13] - Funds from Operations (FFO) decreased to $0.35 per share, and Adjusted Funds from Operations (AFFO) decreased to $53 million due to increased interest expenses and lower interest income [13] - Same-property cash Net Operating Income (NOI) decreased by 1.4% for the quarter, primarily due to higher office operating expenses, although multifamily NOI growth partially offset this decline [13] Business Line Data and Key Metrics Changes - The company signed 896 office leases totaling 3.4 million square feet for the full year of 2025, with 224 office leases covering 906,000 square feet signed in the fourth quarter [11] - Positive net absorption of 104,000 square feet was achieved in the fourth quarter, with strong demand across diversified tenant industries [11][12] - The residential portfolio experienced a same-property cash NOI increase of almost 5% compared to the prior year, maintaining full occupancy [5][12] Market Data and Key Metrics Changes - Office tenant demand was spread across various industries, including financial services, legal, health services, education, and real estate, with no single segment exceeding 20% of tenant demand [11] - The company noted that all markets, except Hawaii, showed positive absorption in the fourth quarter, indicating strong demand across its portfolio [100] Company Strategy and Development Direction - The company plans to focus on office leasing and re-tenanting Studio Plaza, with a straightforward strategic plan for 2026 [6][7] - Development projects include the conversion of 10900 Wilshire into a mixed-use residential and office building and the redevelopment of Landmark Residences [6][8] - The company aims to capitalize on attractive acquisitions in its markets, where current valuations are significantly discounted compared to long-term values [7][87] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term fundamentals of their markets and the quality of their portfolio, despite acknowledging potential challenges in 2026 [7] - The company is monitoring leasing demand closely and remains optimistic about the pipeline, although caution is advised for the upcoming year [22][23] Other Important Information - The company executed nearly $2 billion in debt transactions at competitive rates, extending its maturity profile and strengthening its balance sheet [6] - Guidance for 2026 indicates a net income per common share diluted between -$0.20 and -$0.14, with FFO per fully diluted share expected between $1.39 and $1.45, primarily reflecting increased interest expenses [13][14] Q&A Session Summary Question: Stock buybacks versus acquisitions - Management indicated a preference for acquisitions over stock buybacks, citing concerns about increasing leverage and the need to focus on development projects and leasing [18][19] Question: Market demand and absorption trends - Management expressed hope that the positive absorption trend indicates a fundamental shift in market demand, although they acknowledged the need for consistent performance over multiple quarters [22][23] Question: Industry consolidation impact - Management is not concerned that media industry consolidation will negatively impact leasing demand, as they believe it may rejuvenate the market [28] Question: Development pipeline and yields - Management confirmed that they are planning additional residential development sites and expect yields to be at least 8% upon completion [33][56] Question: UCLA lease expirations - Management clarified that UCLA operates as separate groups, and while some leases may expire, they do not foresee significant shrinkage in demand [46] Question: Political initiatives and G&A impact - Management acknowledged that political engagement has increased costs but emphasized that their G&A remains lower than peers [50][51] Question: Demand differences across markets - Management noted that positive absorption was seen across all markets except Hawaii, with expectations for continued strong performance [100] Question: Occupancy trajectory and lease expirations - Management expects occupancy to pick up during the year, despite typical seasonality affecting the first quarter due to lease expirations [106] Question: Hollywood union negotiations impact - Management does not anticipate significant impact from Hollywood union negotiations on leasing demand within their portfolio [108]

Financial Data and Key Metrics Changes - Revenue increased by 1.8% to $249 million compared to Q4 2024, driven by both office and multifamily revenues [13] - Funds from Operations (FFO) decreased to $0.35 per share, and Adjusted Funds from Operations (AFFO) decreased to $53 million due to increased interest expenses and lower interest income [13] - Same-property cash Net Operating Income (NOI) decreased by 1.4% for the quarter, primarily due to higher office operating expenses, although multifamily NOI growth partially offset this [13] Business Line Data and Key Metrics Changes - The company achieved 100,000 sq ft of net positive office absorption in Q4, with strong demand and high retention rates [4] - Multifamily segment reported full occupancy and a nearly 5% increase in same-property cash NOI compared to the prior year [4] - The company signed 896 office leases totaling 3.4 million sq ft for the full year of 2025, with 224 office leases covering 906,000 sq ft signed in Q4 [11] Market Data and Key Metrics Changes - Office tenant demand was diversified across various industries, with no single segment exceeding 20% of tenant demand in Q4 [11] - The company noted that financial services, legal, health services, education, and real estate led the demand [11] - The only market that experienced a dip in Q4 was Hawaii, while all other markets in L.A. showed positive movement [102] Company Strategy and Development Direction - The company plans to focus on office leasing and re-tenanting Studio Plaza, with a straightforward strategic plan for 2026 [6] - Construction is set to begin on 10900 Wilshire, converting an existing office tower into residential units, and the Landmark Residences redevelopment is also underway [5][8] - The company aims to capitalize on attractive acquisitions in the current market cycle, believing that current valuations offer significant discounts to long-term values [6][88] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term fundamentals of their markets and the quality of their portfolio, despite acknowledging potential challenges in 2026 [6] - The company remains cautious about occupancy growth, with guidance reflecting increased interest expenses and no assumptions of occupancy growth despite positive Q4 results [13][14] - Management noted that political initiatives and regulations could impact operations and G&A costs in 2026 [51][53] Other Important Information - The company executed nearly $2 billion in debt transactions at competitive rates, extending its maturity profile and strengthening its balance sheet [5] - Management indicated that the anti-rent gouging ordinance has not materially impacted their operations or rent growth [91][94] - The company has significant development sites in Honolulu, with plans to build additional residential units as market conditions align [75] Q&A Session Summary Question: Stock performance and acquisition strategy - Management indicated a preference for acquisitions over stock buybacks, citing concerns about increasing leverage through buybacks [19][21] Question: Market demand and absorption trends - Management expressed hope that positive absorption trends indicate a fundamental shift in market demand, although caution remains for the upcoming year [22][23] Question: Industry consolidation impact - Management does not foresee significant negative impacts from media industry consolidation, believing it may rejuvenate demand for their tenants [29] Question: Development pipeline and yields - Management confirmed that they are actively planning additional residential projects, with expected yields above 8% [34][58] Question: Guidance on straight-line rent and NOI - Management explained that higher straight-line rent guidance reflects existing leases and new leasing activity, but they are not ready to provide specific NOI breakdowns for Studio Plaza [39] Question: UCLA lease expirations and political initiatives - Management clarified that UCLA operates independently across departments, and political initiatives have led to increased G&A costs but have not materially impacted operations [46][51]

Financial Data and Key Metrics Changes - The company reported FFO of $0.97 per diluted share in Q4 2025, with occupancy ending the year at 81.6%, reflecting a 60 basis point sequential improvement [24] - Cash same-property NOI growth was negative 7.2% in Q4, primarily due to a sizable restoration fee recognized in Q4 2024, which detracted 350 basis points from current year growth [24] - The 2026 FFO guidance range is set at $3.25-$3.45 per diluted share, with an expected average occupancy of 76%-78%, a decline of 390 basis points at the midpoint compared to 2025 [26][27] Business Line Data and Key Metrics Changes - Fourth quarter leasing totaled approximately 827,000 sq ft, marking the strongest performance in six years, leading to a full-year leasing total of approximately 2.1 million sq ft, a significant year-over-year increase [4][5] - Key leasing highlights included a 93,000 sq ft lease with the Fitler Club in Hollywood and a 316,000 sq ft lease with UCSF at Kilroy Oyster Point Phase Two, indicating strong demand in the life sciences sector [6][8] Market Data and Key Metrics Changes - The company experienced the healthiest level of office demand since 2019, with a forward leasing pipeline growing by over 65% in the last year [6] - In San Francisco, premium sublease space is nearly gone, with 47% of the overall availability not transacted since 2021, indicating a recovery in the market [44][60] Company Strategy and Development Direction - The company is focused on disciplined execution across its platform, including driving leasing, monetizing non-core assets, and redeploying capital into high-quality opportunities [4][15] - The acquisition of Nautilus for $192 million strengthens the company's presence in the life sciences sector, positioning it to capture demand across West Coast markets [14][15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the leasing environment, particularly in San Francisco, where new business formation is driving demand [81] - The company anticipates a robust M&A environment in the life sciences sector, with expectations for continued growth in leasing activity [8][9] Other Important Information - The company completed approximately $755 million in sales, including $465 million from operating properties and $165 million from land sales, indicating a strategic approach to capital allocation [17] - The anticipated yield at Kilroy Oyster Point Phase Two is now in the mid-5% range, reflecting adjustments based on leasing activity and market conditions [11] Q&A Session Summary Question: Can you discuss the UCSF anchor lease and its late commencement? - Management noted that the UCSF lease is part of a new development project in shell condition, requiring time for build-out and space planning [34][35] Question: What are the expectations for retention on the 1.05 million sq ft expiring in 2026? - Management expects substantial move-outs from this pool but has already backfilled about 140,000 sq ft and anticipates additional renewals [50][51] Question: What is the competitive landscape for KOP and potential monetization? - Management remains confident in the long-term growth potential of KOP and believes it has created significant value in phase one, with future phases dependent on achieving favorable yields [76][77]

Financial Data and Key Metrics Changes - The company reported FFO of $0.97 per diluted share in Q4 2025, with occupancy ending the year at 81.6%, reflecting a 60 basis point sequential improvement [22][24] - Cash same-property NOI growth was negative 7.2% in Q4, primarily due to a sizable restoration fee recognized in Q4 2024, which detracted 350 basis points from current year growth [22][24] - The anticipated yield at Kilroy Oyster Point Phase Two (KOP2) is now in the mid-5% range, approximately 100 basis points below the original underwriting [10][24] Business Line Data and Key Metrics Changes - Fourth quarter leasing totaled approximately 827,000 sq ft, marking the strongest fourth quarter performance in six years, resulting in total full-year leasing of approximately 2.1 million sq ft, a significant year-over-year increase [3][4] - Key leasing highlights included a 93,000 sq ft new lease with the Fitler Club in Hollywood and a 316,000 sq ft lease with UCSF at KOP2, bringing the lease rate at KOP2 to 44% [4][6] Market Data and Key Metrics Changes - The company experienced the healthiest level of office demand since 2019, with a forward leasing pipeline that has grown by more than 65% over the last year [4][5] - In San Francisco, premium sublease space is virtually gone, indicating a positive sign for the market recovery [41][42] Company Strategy and Development Direction - The company is focused on driving leasing across its operating and development portfolios, monetizing non-core asset sales, and redeploying proceeds into select opportunities to enhance long-term growth [3][10] - The company plans to capitalize on the recovering leasing environment and improving capital markets, targeting $300 million in operating portfolio dispositions in 2026 [21][29] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the leasing pipeline, indicating that the pipeline is about 65% higher than a year ago, with high confidence in getting tenants into occupancy over 2026 [49][50] - The company noted that the innovation pipeline remains exceptionally active, with more than 50 novel drug therapies anticipated to receive FDA approval in 2026, reflecting continued scientific advancement and investment [8][9] Other Important Information - The company successfully completed the sale of Sunset Media Center for $61 million and Kilroy Sabre Springs for $125 million, monetizing mature, capital-intensive assets [10][11] - The acquisition of Nautilus for $192 million strengthens the company's presence in the life science sector and positions it to capture cutting-edge lab and office demand [12][13] Q&A Session Summary Question: Inquiry about the UCSF anchor lease and its late commencement - Management clarified that the UCSF lease is part of a new development project currently in shell condition, requiring time for space planning and build-out [31][33] Question: Clarification on KOP2 yield and tenant improvements - The mid-5% yield is a cash stabilized yield, and all transactions signed to date have been reflected in the new cost estimates [37][38] Question: Update on leasing activity and competitive impact in San Francisco - Management noted that premium sublease space is nearly gone, and the recovery in San Francisco is evident with significant tenant activity and expansion-focused leases [41][42][80] Question: Retention expectations for expiring leases in 2026 - Management expects substantial move-outs from the 1.05 million sq ft of expiring leases, with progress already made in backfilling some of that space [48][49] Question: Market conditions and tenant space needs - Management indicated that new business formation and growth, particularly in AI, are driving demand for office space, with many tenants discussing expansion [78][79]

Financial Data and Key Metrics Changes - Comparable FFO for 2025 was $2.32 per share, slightly higher than 2024 and better than anticipated [26] - Fourth quarter comparable FFO was $0.55 per share, down from $0.61 per share in Q4 2024, primarily due to higher net interest expense [26] - Same-store GAAP NOI increased by 5% for the quarter, while same-store cash NOI decreased by 8.3% [27] Business Line Data and Key Metrics Changes - In 2025, the company leased 4.6 million sq ft of office space, with 3.7 million sq ft in Manhattan, marking the highest leasing volume in over a decade [6] - Average starting rents in Manhattan were $98 per sq ft, with mark-to-markets of +10.4% GAAP and +7.8% cash [7] - Office occupancy rose from 88.8% to 91.2% in 2025, driven by significant leasing activity [12][28] Market Data and Key Metrics Changes - The New York office market is experiencing a tightening landlord's market, with robust tenant demand from finance and tech sectors [4] - The financing markets for Class A assets are strong, with CMBS spreads at their tightest since 2021 [29] - The company has a liquidity of $2.39 billion, including cash balances of $978 million and undrawn credit lines of $1.41 billion [22] Company Strategy and Development Direction - The company is focused on its Manhattan-centric office strategy, with significant developments planned, including 350 Park Avenue and 623 Fifth Avenue [5][15] - The company aims to capitalize on the shortage of large blocks in better buildings by bringing prime space to market [14] - The management team is committed to maintaining a highly liquid, cash-heavy balance sheet while exploring stock buybacks [22][24] Management's Comments on Operating Environment and Future Outlook - Management believes the current fundamentals in Manhattan are the best in 20 years, with expectations for continued tightening in the landlord's market [4] - The company anticipates significant earnings growth in 2027 as the positive impact from PENN 1 and PENN 2 lease-up takes effect [28] - Management acknowledges the disconnect between stock price and asset value, viewing current stock buybacks as an attractive investment opportunity [24][25] Other Important Information - The company has extended maturities on nearly $3.5 billion of debt through 2031 and has been active in refinancing to bolster liquidity [23][30] - The acquisition of 623 Fifth Avenue is viewed as a strategic move, with plans to create a high-quality boutique office space [15][16] - The company is also developing a 475-unit rental residential building on 34th Street, expected to break ground in the fall [19] Q&A Session Summary Question: Changes in the structure of 350 Park Avenue - Management confirmed that there were amendments related to the overall deal, providing flexibility in equity percentage [35] Question: Overall leasing pipeline and tenant conversations - The leasing pipeline remains strong, with over half of the activity from new tenants and significant expansion from financial services and law firms [40] Question: Cash and GAAP same-store NOI difference - Management expects to see cash NOI turn positive in the second half of 2026 as free rent periods end [45] Question: Retail market conditions on Upper Fifth Avenue - The retail market is improving but still struggling to meet top-tick rents from four or five years ago [48] Question: Difference between GAAP occupancy and leased occupancy - The $200 million difference is not annualized and will be recognized as tenants build out their spaces [51]

Financial Data and Key Metrics Changes - The company reported Nareit FFO per share growth of 7.2% and Core FFO per share growth of 7% for 2025, with same-center NOI growth of 3.8% [5][18] - For 2026, guidance indicates mid-single digit growth rates for Nareit FFO and Core FFO per share [5][20] Business Line Data and Key Metrics Changes - The company executed 1,026 leases totaling approximately 6 million square feet in 2025, with portfolio occupancy ending the year at 97.3% leased [12][13] - Comparable renewal rent spreads were reported at 20% in Q4, while new leasing rent spreads were strong at 34.3% [13] Market Data and Key Metrics Changes - The company noted strong demand for necessity-based retail, with no signs of slowing, and high retention rates of 93% [11][12] - The company anticipates bad debt in 2026 to be in line with 2025, which was approximately 78 basis points of revenue [14][56] Company Strategy and Development Direction - The core business focuses on grocery-anchored shopping centers, with a disciplined acquisition strategy targeting an unlevered IRR of 9% for grocery-anchored acquisitions and above 10% for everyday retail centers [8][10] - The company plans to continue its development and redevelopment projects, with 20 projects under active construction and an estimated total investment of approximately $70 million [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the consumer and the strength of their portfolio, despite market concerns about consumer health and tariffs [5][9] - The company believes it can consistently deliver 3%-4% same-center NOI growth and achieve mid to high single-digit core FFO per share growth on a long-term basis [22] Other Important Information - The company has approximately $925 million of liquidity to support acquisition plans and aims to sell between $100 million and $200 million in assets in 2026 [18][20] - The company sold approximately $145 million of assets in 2025 at PECO share [20] Q&A Session Summary Question: Expectations for acquisition volume and competition for grocery-anchored assets - Management acknowledged increased competition but noted a high level of confidence in reaching acquisition targets due to a balanced market [25][26] Question: Update on the Ocala development parcel and timing - Management expressed excitement about the Ocala market, with expectations for unlevered returns above 9.5%-10% on the project [28][29] Question: Occupancy levels and leverage in renewal negotiations - Management indicated that high occupancy levels provide leverage in negotiations, with expectations for continued growth in inline stores [32][35] Question: Capital deployment and stock buybacks - Management stated that while they consider share buybacks, they believe better returns can be achieved through acquisitions and redevelopment [45][46] Question: Impact of Amazon's store closures on grocery demand - Management noted that Amazon's struggles with brick-and-mortar retail do not significantly impact their grocery demand, as traditional grocers maintain strong market positions [49][50] Question: Bad debt expectations and visibility - Management confirmed that bad debt levels are consistent with previous expectations, with no significant concerns moving into 2026 [56][57] Question: Credit rating and cost of debt - Management believes they are an underrated credit and that scale will help improve their credit rating, which could lower their cost of debt [60][61] Question: Disposition strategy and cap rates - Management outlined a strategy focused on trading out stabilized assets for higher return opportunities, with expectations for cap rates in the 5.5% to sub-5 range [68][70]

Financial Data and Key Metrics Changes - The company reported record real estate funds from operations (FFO) of $4.8 billion, or $12.73 per share, reflecting a 4.2% growth from $3.35 per share in the prior year [6][11] - Domestic property net operating income (NOI) grew 4.8% year-over-year for the quarter and 4.4% for the year, while portfolio NOI, including international properties at constant currency, grew 5.1% for the quarter and 4.7% for the year [11][12] - The company returned approximately $3.5 billion in cash to shareholders through stock repurchases and dividends, with a total of approximately $48 billion paid in dividends since going public [6][14] Business Line Data and Key Metrics Changes - The company signed more than 1,300 leases totaling over 4.4 million square feet during the quarter and over 4,600 leases for more than 17 million square feet for the year, with approximately 30% of annual volume being new deals [8][9] - Average base minimum rents increased by 4.7% year-over-year for malls and premium outlets, with retailer sales per square foot for these properties at $799 for the year [12] Market Data and Key Metrics Changes - Malls and premium outlets ended the year with an occupancy rate of 96.4%, while mills reached 99.2% occupancy [11] - The company expects to drive higher occupancy at newly acquired assets, which slightly reduced overall occupancy rates [12] Company Strategy and Development Direction - The company acquired $2 billion of high-quality retail properties and completed over 20 major redevelopment projects, enhancing the quality of its portfolio [5][8] - The development pipeline now exceeds $4 billion, with significant projects scheduled for completion in 2026, including expansions and mixed-use developments [10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about strong leasing demand and traffic growth, despite potential headwinds from tariffs affecting retailers [25][42] - The company anticipates real estate FFO of $13-$13.25 per share for 2026, with domestic property NOI growth expected to be at least 3% [14][15] Other Important Information - The company completed approximately $9 billion in financing activities during 2025, maintaining a strong balance sheet with over $9 billion in liquidity at year-end [13] - The company announced a dividend of $2.20 per share for the first quarter of 2026, a year-over-year increase of 4.8% [14] Q&A Session Summary Question: Can you provide details on rents for new and renewal leases? - The company disclosed that new rents on leases are approximately $65 per square foot, with a 30% new leasing rate being a good run rate [17] Question: What are the early observations on the Simon Plus loyalty program? - Management noted early positive adoption from customers and brands, with plans to continue enhancing engagement and partnerships [20][22] Question: How is tenant credit and bad debt expected to change? - Management indicated that tariffs are putting pressure on retailers, particularly smaller ones, but overall tenant management remains cautious [24][25] Question: What incremental NOI or FFO should be expected from redevelopment projects? - The company expects about a $30 million contribution in 2026 from projects that are set to stabilize [34] Question: How does the leasing pipeline compare year-over-year? - The leasing pipeline is up about 15% over last year, indicating strong demand across all categories [18][111] Question: What is the outlook for luxury retail demand? - Management noted that luxury brands are showing mixed signals, with some growing and others being cautious, but overall, the long-term outlook remains positive [104][106]

Industry Trend - Leasing firms are experiencing losses due to misjudging the rapid decline in electric vehicle prices [1]